- Donald Trump called Bitcoin a “Fraud”.
- Last year, he changed his mind and promised to create a reserve led by the Bitcoin government.
- Now that reserve exists. What to do, and why should the US possess?
SH.BA has a strategic reserve of Bitcoin.
Q: What is a strategic reserve of Bitcoin?
Most important questions: Why should US have a strategic reserve of Bitcoin?
Spoiler: I have tried to understand this for a while, and I really can’t understand.
Other people look similarly confused. “It is not clear how such a reserve would work or how it would benefit from taxpayers,” reported Thursday Reuters.
And while I usually don’t compare myself to Donald Trump, I definitely made the same face he did on Thursday, when someone is telling me something I don’t understand completely. “And that’s something you believe in?” He asks David Sacks, Crypto Crypto, before signing the executive order by creating the reserve.
To be clear: I know what is supposed to be the reservation. And I know why Trump signed the order by creating it.
The president, who had previously called Bitcoin “a fraud”, changed his stay in cryptocurrency last year – he now has his cryptocurrency – and pledged to create the reserve at a Nashville Bitcoin conference. His turn also coincided with the embrace of the crypto industry for his candidacy. (Although he still did not seem like a true believer in April 2024: “Spend a good time with your Bitcoin and your crypt and everything else you are playing with,” he told the crowd as he left the scene.)
But I don’t get the point of a strategic reserve.
SH.BA already owns a Bitcoin gang, mainly acquired through the seizure of assets in court proceedings. These coins now have to go into reserve, and the government is never thought to sell.
While some crying fans and Bitcoin thought Trump’s plan was to go out and buy more Bitcoin, it doesn’t seem to happen now. Although the order appears to provide a room with difficulty in that front as it instructs Trump’s cabinet members “develop neutral budget strategies for purchasing additional Bitcoin”.
If you read the news fans comment on the news, you will see a mixed reaction: some are upset that there is no immediate plan for SH.BA to buy too much Bitcoin – which will raise Bitcoin prices. Others think it is a good thing for SH.BA to actively support Bitcoin instead of saying, calling it “a trick”.
What I haven’t found – and feel free to tell me if you have – it’s an explanation as to why this is good politics.
Sacks and others say this is just the US equivalent that holds gold in Fort Knox, or possessing reserves of other valuable goods, like the oil. But for what end? The government’s relationship with gold is an old and complicated. Holds extra oil around in case of emergency. I don’t see a parallel for cryptocurrencies.
I also thought that one of the main ideas behind the crypt was that it allowed people to create wealth without including the government. And that sure seems to be the involvement of the government. At least, since the US holds a Bitcoin gang and is now promising not to sell it Bitcoin, it seems that this is the government that actively supports Bitcoin.
Look I am not a cryptocurrency expert. So, over the past few days, I reached some cryptocurrency experts-who are also people who are fans of Trump’s pro-Christo attitude 2.0-To explain the backing thought, and … could not make them talk to me about it. Even outside the record.
This reaction certainly proves nothing. But it makes me think that even some cryptocurrency people are not 100% convinced of it. Let’s see if people feel more comfortable for this idea within a year or so.